Leaders from South Carolina’s business community are not happy with state lawmakers over their failure to pass a road funding bill this year.
The regular Statehouse session ended last week with a filibuster in the Senate that prevented the chamber from even taking up the measure that would increase the state’s gas tax and other vehicle fees to raise a projected $800 million. Republican opponents of raising the gas tax, particularly State Sen. Tom Davis, R-Beaufort, had run out the clock by refusing to stop talking on earlier agenda items.
“The South Carolina business community is disappointed that the General Assembly didn’t take up the number one issue as far as they’re concerned related to infrastructure,” SC Chamber of Commerce president Ted Pitts told South Carolina Radio Network. “When you look at where they started at the beginning of the year and where we ended up at the end, it’s just disappointing that in the Senate we didn’t even really get it debated.”
The bill is not yet dead, as this was only the first of a two-year term. It will be near the top of the Senate agenda when lawmakers return in January. But Pitts said many in the corporate world are still frustrated that the Senate did not act after legislators and Gov. Nikki Haley had claimed road funding would be a priority this upcoming year.
The House of Representatives had spent months studying how to pay for increased roads funding without raising the gas tax, worried about a potential veto from Haley. But Haley herself announced during her State of the State speech in January that she would support a gas tax increase — but only if legislators approved a corresponding income tax decrease, as well (gas tax money is specially designated for infrastructure, while income tax goes in the General Fund budget).
Democrats claimed the governor’s insistence on a tax offset complicated things. “We all knew leading up to the start of this legislative session that fixing potholes was the top priority,” State Sen. Creighton Coleman, D-Fairfield, said in an email. “Unfortunately, Governor Haley during her State of the State Address killed a roads bill for this year by putting a income tax break for the wealthy above roads as a priority in our state. It is a disappointing day in South Carolina, because we need a true roads bill not a tax plan.”
The House tried to meet the governor halfway by passing its own version of the bill in April that would place an excise tax on wholesale gas sales in exchange for a slightly lower gas tax. The bill passed by a 87-20 vote, enough to override Haley’s veto threat for what she believed was not enough tax relief. The House version also attempted to placate the governor by giving her more control of the Transportation Commission which approves all state road funding projects. The commission is mostly chosen by legislative delegations under current law, although the governor chooses the Department of Transportation’s director. It also tried to reduce the state’s road mileage by offering counties incentives to take ownership of lesser-traveled, secondary roads.
But the Senate’s Finance Committee largely disregarded the House plan, as a coalition of Democrats and moderate Republicans outvoted more conservative senators in favor a plan that increased the gas tax by 12 cents per gallon and also increased various vehicle registration and license fees in order to double the amount of expected revenue from the House version. The Senate version did not address DOT leadership or reducing mileage.
The move alienated many Republicans who said they had been willing to consider a tax increase so long as it came with other reforms. “I’m OK to put the money there; I just don’t want all the money to go to Charleston,” State Sen. Shane Massey, R-Edgefield, told a North Augusta town hall, per the Aiken Standard. “Most of the money goes to the coast or it goes to Greenville and Spartanburg, and we end up getting overlooked.”
The dissatisfaction gave Davis the opening he needed. Knowing Senate leaders lacked the votes to sit him down, Davis spoke for hours on a separate budget measure that was immediately ahead of the road funding bill on the Senate floor. The Beaufort Republican criticized his fellow senators for trying to increase taxes in a year that the state collected roughly $400 million more than expected in taxes and other revenue. He also supported the governor’s tax relief plan and House efforts to revamp the Transportation Commission.
“We’re going to go ahead and back all of our hopes on a massive tax increase?” Davis asked rhetorically from the Senate floor. “I think that’s irresponsible.”
Davis was able to win some battles, such as convincing other senators to set aside a majority of the surplus revenue this year into roads. But he continued delaying debate on the roads funding bill itself, even after he and other Senate Republicans introduced a plan that included the governor’s desired income tax cut. The end of the session came at 5:00 p.m. on June 4 with Davis still holding the floor.
House Speaker Jay Lucas, R-Hartsville, made no secret that he was frustrated with the Senate, sending out a release within minutes of the session ending, “Based on the Senate’s inability to address a majority of these issues, it is my hope that our colleagues in the other Chamber will take action on these items next year,” he said in the statement. “The people of South Carolina do not want these issues to fall through the cracks due to inaction.”
Business groups are trying to avoid assigning individual blame, but they also view the Senate as more to blame than the House. “If everyone says it’s their top priority and they don’t do anything, then that seems to me to be a failure of leadership,” the Upstate Chamber Coalition’s vice president of public policy Jason Zacher told South Carolina Radio Network.
Legislators will return to the Statehouse for a special session next week to take up budget bills. One remaining fight will be how much surplus money should be set aside for roads next year. The Senate wants a majority of it for road repairs while the House wants to divide the money with other priorities, particularly incentives for Volvo’s new Berkeley County plant.
Statehouse leaders are expecting a long debate, likely extending past the end of the current fiscal year on June 30. The House has already voted to pass a resolution that would fund state government past July 1. The Senate Finance Committee will take it up on Wednesday.